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Binance Coin (BNB) is an ERC20 token that acts on the Binance Smart Chain. This token was launched by the Binance platform and acts as an internal gas and official cryptocurrency. The cryptocurrency supports transactions within the platform and also offers some discounts to its users.
BNB also helps its users to finance some projects on its main platform related to the Blockchain. BNB intends to become a Gas within the system.
History of BNB
BNB was launched after the Initial Cryptocurrency Offering (ICO) on July 3, 2017, before the exchange opened its doors 11 days later. In the early days of the cryptocurrency the issue price was 1 ETH to issue 2 700 BNB which would be 20 000 BNB for 1 BTC. Currently its price has grown significantly.
BNB was issued as another ERC20 token on the Ethereum network. The ICO for its launch managed to sell a total of 100 million coins although BNB only has a limited total supply of 200 million coins. A very curious aspect of the cryptocurrency is that half of the BNB in existence will be destroyed.
Some time after its launch, namely in April 2019, it was decided to exchange BNB ERC20 coins with BEP2 BNB at a 1:1 parity. This means that BNB is no longer hosted on Ethereum.
How does BNB work?
Binance Coin functions as a payment method for Binance exchange fees and at the same time to participate in the platform’s token sales. On the other hand, the cryptocurrency also powers the platform by way of gas.
- The BNB structure has a data carrier with several allocation units in charge of maintaining and increasing security and at the same time accelerating the search for data thanks to the process known as fragmentation, which is based on sorting the memory.
- BNB’s blockchain is open, i.e. its transactions are fully transparent. However, BNB ensures the privacy of both the sender and receiver and the sum sent.
- Fees for each transaction are paid with the same digital currency and rebates of up to 50% can be made if paying with BNB for the first four years.
Regarding its mining, Binance Coin cannot be mined through Proof of Work (PoW) like most cryptocurrencies, since the blockchain in which it operates uses the Byzantine Fault Tolerance (BFT) consensus mechanism. Instead of miners, the network relies on block validators.
One of the advantages offered by BNB is that those users who make a large number of transactions with it get Airdrops on the platform, as a free BNB reward.
When paying fees in BNB the user can get discounts, but only on the platform, which is not very helpful if we want to operate with BNBs in other projects. Discounts decrease over the years from 50% to no discounts at all for continuing to use the platform.
What is BNB burning?
Initially, Binance performed a coin burn on the Ethereum network using a smart contract with a burn function as a tool. But… what does this consist of? Binance burns a specific amount of cryptocurrencies based on transaction statistics within the exchange over the last three months.
This remained active until BNB migrated from the Ethereum network to the Binance Chain network. Since its launch the coin burning that used to take place on the Ethereum network now takes place on Binance Chain. Using a specific command and thus replacing the smart contract.
If you have decided to buy BNB you will need a wallet to store and manage them. Not all wallets are BNB capable, but here are some of the best ones that will work for you.
- Ledger Nano S. This is a hardware wallet that has managed to position itself as one of the best on the market thanks to its storage options and the security it offers.
- Trezor. This is a second hardware wallet option with the feature that it presents a user-friendly interface. It is in the form of a USB device and can be connected to various operating systems so it will be very easy to manage our assets.
- Exodus. This wallet is available in mobile version. It has a very simple and intuitive interface, making it a perfect option to get started in the world of cryptocurrencies. In addition, it supports large amounts of cryptocurrencies.